Airbus removes four-engined A340 from catalogue

DavidPearson

--Airbus books EUR192 million gain from program halt

--No impact on production or jobs at Toulouse

(adds details, CFO comment in second paragraph)

PARIS -(MarketWatch)- Commercial aircraft builder Airbus is halting production of its four-engined, long-haul A340 airliner, a move that has provided parent company European Aeronautic Defence & Space Co. NV (EAD.FR) with a EUR192 million one-time gain in the third quarter of this year, EADS said Thursday.

"We have accepted reality. We have not sold any A340s for nearly two years," EADS Chief Financial Officer Hans Peter Ring told an analysts' conference call. The EUR192 million gain is from the write-back of a provision taken by Airbus on the A340 program.

Airbus has sold a total of 379 wide-bodied A340s, which has been in service with airlines since 1993, and has delivered all but four. Two of those are destined for VIP customers, an Airbus spokesman said, and the other two were ordered by India's Kingfisher Airlines Ltd. (532747.BY) but have been cancelled.

The A340 is more costly to operate than twin-engined jets, such as the A330 and Boeing Co's
BA, +0.71%
777, and demand for the plane dried up as fuel costs have risen sharply. A change in international air transport regulations, allowing airlines to fly longer routes over the ocean with twin-engined jets capable of flying on one engine, meant that the A340 was of less interest to cost-conscious airlines.

The A340 is built on the same Airbus assembly line as the A330 in Toulouse, France. There will be no change in the line's production rate, an Airbus spokesman said, as demand for the A330 is more than compensating for the tapering off of the A340. "There will be no impact on production or on jobs," he said.

The A340 is capable of flying up to 9,000 nautical miles with 350 passengers.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.